Posted on 10/13/2005 5:13:07 AM PDT by harpu
Delphi Corp.'s Chapter 11 bankruptcy filing represents more than just another Midwest metal-bender facing harsh reality. It marks a true reckoning for the traditional auto industry and the end of a 75-year-old way of life in America: that of the highly paid but unskilled worker. It was a noble concept, established largely by the United Auto Workers union in the 1930s. But it cannot withstand a global economy that has ended the UAW's labor monopoly in the auto industry, and a consumer body that won't pay more to subsidize costly employee benefits that most consumers themselves don't have.
Delphi, a loss-ridden auto-parts giant, was spun off from General Motors in 1999. Now GM too is at "serious risk" of bankruptcy unless it radically overhauls its compensation plans, says R.S. "Steve" Miller, Delphi's new chairman and CEO. GM, Delphi's largest customer, provided pension and other guarantees to Delphi workers in the 1999 spinoff deal. The auto maker says the Delphi bankruptcy might add another $11 billion to its already hefty pension liabilities.
For starters, the UAW's very success at obtaining job security and healthy pay for its members has put both achievements in mortal danger. Consider the benefits package, now worth some $40 an hour on top of wages, for workers at Delphi, GM and other Detroit car companies.
Delphi is paying out $100 million per quarter to 4,000 idled workers, Mr. Miller says. No wonder it was good while it lasted.
(Excerpt) Read more at online.wsj.com ...
Like George Washington's doctors, UAW has bled the patient to death and thinks the cure is to draw more blood.............
$40 an hour for benefits on top of wages is a good deal for somebody who graduated from high school at best. It's hard for those people to compete against people who expect less, and are willing to word harder for it.
"$40 an hour for benefits on top of wages is a good deal for somebody... It's hard for those people to compete against people who expect less, and are willing to work harder for it."
No one could say it any clearer!
Of course Gov. Granholm (yes the Canadian one) of Michigan will use this as her socialist mantra for her re-election campaign next year.
She'll blame it outsourcing, evil republicans, and not realize the demise is a direct result of socialist thinking and policies she adores.
This bankruptcy ought to ensure MI's unemployment rate stays atop the nation.
Very interesting. Delphi, GM and the future of both.
Excuse me but don't consumers also pay to support Congress critters whose employee benefits are better than our own? Perhaps it's time to introduce foreign competition into government. :)
It's become more clear every year, when an SUV at $45k, cost more than my fathers 3 bedroom, 2 bath, 2 car garage house did just 20 years ago. His brand new house, in West Palm Beach, was just $32k. How can they continue to charge so much for something that may last 10 to 15 years? It's no surprise that the unions stubborness has cost thousands of jobs.
Congress critters face re-election every 2 years. They also have primaries. So they can actually be challenged twice every 2 years. Where as unions are a monopolistic entity. Their employees have job protections that are insane by any other standard. Ever see a teacher or govt. employee get fired? It takes years, if ever.
Oh, it's not just you, aunty. That's what happens.
When the UAW had a stranglehold on labor, the auto companies just accepted this as the cost of doing business and passed it on to the consumer. And the consumer kept on buying UAW-produced autos because that's the only choice they had.
The average consumer doesn't make enough to continue to provide for (basically) unskilled labor in the overly-generous manner to which they have become accustomed. So things are changing. And the UAW will eventually go the way of the dinosaur.
How about the concept that the workers should be paid enough to buy the cars that they are manufacturing? Isn't that what America is all about?
"How about the concept that the workers should be paid enough to buy the cars that they are manufacturing? Isn't that what America is all about?"
Hmmmm, for someone who's been here a while, you don't quite have the FR rhetoric down. Let me try to refresh:
#1 - Unions are evil. ALL unions. Whenever in doubt refer to this.
#2 - American workers are lazy, stupid and greedy. Foriegn workers will work in unsafe environments for $0.57 an hour. Until American workers jobs are on that scale, American workers deserve scorn.
#3 - We don't need jobs in America. Ship them overseas, make people work and scrape to figure out what to do. That will make them better people and America more productive.
Interesting to me, most here believe those things. Most believe they'll be ok, because they work hard. When you bring up things like quality of life, and the possiblity of infrastructure in America falling apart because no one is making any money, you will be chided as a liberal, or a communist.
I'm learning that the liberals haven't cornered the market on stupidity.
So are you saying that you agree with someone being paid $27.00 an hour for unskilled labor? I don't think unions are always all bad and uneeded but the UAW hasn't been dealing with reality and now were starting to see the results of that.
"So are you saying that you agree with someone being paid $27.00 an hour for unskilled labor?"
Actually, I'm more of a conservative on that point then my neighbors, (this is a very blue collar area).
The UAW is the worst of all unions. The UAW must be tamed or broken. There are janitors that make that same $27 an hour. Outrageous.
But, building an auto, for many of the jobs is no picnic, and it beats one physically, and mentally. (For those that would dispute the mental component, ever try doing a reptitative mindless job for 8-10 hours a day, I have, it takes it's toll).
The people should be compensated. What should be the level? I honestly don't know. I'm guessing around $15 in today's market. Also, the automakers need more flexiblity in getting rid of the drunks and crackheads that don't produce.
It's a complex and ugly problem.
But I've seen lots of posts that adhere to the 3 points I've outlined. Including the guy who worked 60+ hours a week, and had no time to take vacations, and had no sympathy for anyone who didn't do the same.
There is a middle ground. Unfortunately, it's not human nature to seek the middle ground.
Not necessarily. Should jet mechanics be paid enough to buy a Cessna?
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